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Some Interesting Mortgage Info

Blog by Patricia Houlihan - Personal Real Estate Corporation | September 23rd, 2014

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Should You Skip a Mortgage Payment?

Lenders are advertising the option of skipping a mortgage payment more often these days - with one major bank even creating a TV ad!

But unless this is your only option, it's not recommended that you skip a payment because, like most ads that sound  too good to be true, this option is as well.

The banks want you to think that by offering the option to skip a payment they are doing you a favour. But it's important to realize that lenders are in the business of making money. They're not going to offer something that doesn't benefit them in the long run.

And it's not like you can simply choose to skip any payment at will when you need it most. You actually have to prepay your mortgage in order to take advantage of this mortgage vacation option.

You can miss a regular mortgage payment as long as you have already prepaid that amount by doubling up any mortgage payment, increasing your mortgage payments or making lump sum payments. It's important to know how much you can prepay each year before making extra payments - this varies from lender to lender.

And if you're going through the trouble of prepaying your mortgage, you want to make the savings work to your advantage by actually paying your mortgage off quicker - not diminishing those savings by taking a mortgage vacation.

The number of eligible payments covered by your payment vacation will be based on a combination of your prepaid amount and your current regular monthly mortgage payment. There is also typically a maximum payment vacation permitted per mortgage term, regardless of how much you have prepaid.

Other considerations to think about when looking at the mortgage vacation option include:

  • Interest is capitalized (i.e., interest is added to your outstanding principal balance)
  • Borrowers lose the benefit and interest cost savings of prepaying their mortgage once they use the mortgage vacation option

If you happen to already be in arrears on your mortgage, you can't take advantage of this option.

It's always important to read the fine print and ask questions when using a feature advertised by your lender. Better yet, speak to your mortgage professional - we know the ins and outs of all the bank offerings and can help advise you on your best options.

As always, if you have any questions about this information or your mortgage, I am here to help!


Katherine Martin
Mortgage Specialist


Welcome to the September issue of the News & Rate Advisor.


Current Discount Mortgage Rates Sep 2014
Variable Rate 2.40%
1 Year 2.89%
2 Year 2.59%
3 Year 2.69%
4 Year 2.77%
5 Year 2.89%
7 Year 4.09%
10 Year 4.49%
Prime Rate 3.00%
* Rates subject to change and OAC.



Current Bank of Canada Rate & Prime Rates Sep 2014 Sep 2013 Sep 2012
Bank Rate 1.25% 1.25% 1.25%
Prime Rate 3.00% 3.00% 3.00%
Source: Bank of Canada



Average House Prices by City Jul 2014 Jul 2013 Jul 2012
Yellowknife $393,815 $472,467 $292,125
Vancouver $805,061 $757,338 $667,462
Victoria $496,282 $482,908 $475,768
Edmonton $362,091 $345,335 $337,304
Calgary $460,790 $438,192 $409,670
Saskatoon $350,699 $323,441 $323,165
Regina $327,104 $311,759 $297,708
Toronto $550,700 $513,246 $476,947
Hamilton-Burlington $412,694 $383,240 $345,807
Ottawa-Carleton $358,600 $362,346 $340,352
Quebec City $274,862 $265,785 $266,552
Montreal $338,988 $329,339 $331,577
Fredericton $167,455 $178,883 $181,917
Saint John $182,918 $169,592 $177,955
Halifax-Dartmouth $287,288 $275,046 $268,723
Winnipeg $268,817 $262,727 $249,175
Source: CREA - Most Recent Month Reported



Average House Prices by Province Jul 2014 Jul 2013 Jul 2012
National $401,585 $382,373 $353,147
Yukon $278,518 $311,481 $366,075
Northwest Territories $393,815 $472,467 $292,125
British Columbia $548,162 $534,360 $474,954
Alberta $395,552 $379,696 $363,924
Saskatchewan $304,816 $285,147 $277,297
Manitoba $264,171 $253,714 $239,116
Ontario $416,938 $393,984 $368,329
Quebec $276,194 $272,033 $275,689
New Brunswick $164,146 $159,502 $156,913
Prince Edward Island $153,964 $169,864 $154,876
Nova Scotia $224,287 $215,094 $219,708
Newfoundland $294,815 $288,517 $273,649
Source: CREA - Most Recent Month Reported



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